Fs Bancorp, Inc. (FSBW) 10-Q Quarterly Report November 2022

FS Bancorp, Inc. Reports Net Income for the Third Quarter of $8.5 Million or $1.08 Per Diluted Share and the Thirty-Ninth Consecutive Quarterly Dividend

MOUNTLAKE TERRACE, WA – October 26, 2022 –

FS Bancorp, Inc. (NASDAQ: FSBW) (the “Company”), the holding company for 1st Security Bank of Washington (the “Bank”) today reported 2022 third quarter net income of $8.5 million, or $1.08 per diluted share, compared to $8.3 million, or $0.98 per diluted share for the same quarter last year. For the nine months ended September 30, 2022, net income was $22.0 million, or $2.73 per diluted share, compared to net income of $28.8 million, or $3.31 per diluted share, for the comparable nine-month period in 2021.

“Continued loan growth in the third quarter was a result of disciplined credit culture and a focus on hiring employees that understand 1st Security Bank’s commitment to relationships, risk management, and partnering with customers in our communities,” stated Joe Adams, CEO. “We are also pleased that our Board of Directors approved our thirty-ninth consecutive quarterly cash dividend. The quarterly dividend of $0.20 will be paid on November 23, 2022, to shareholders of record as of November 9, 2022.”

“Organic loan growth was partially funded by loan pool sales during the quarter which supplemented deposit growth,” noted Matthew Mullet, CFO. “Net interest margin expansion was a result of loan growth and assets that have repriced faster than deposit liabilities.”

2022 Third Quarter Highlights

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Net income was $8.5 million for the third quarter of 2022, compared to $6.7 million in the previous quarter, and $8.3 million for the comparable quarter one year ago;

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Net interest margin (“NIM”) improved to 4.54%, compared to 4.39% for the previous quarter, and 4.23% for the comparable quarter one year ago;

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Repurchased 74,073 shares of our common stock during the third quarter at an average price of $30.22 per common share;

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Loans receivable, net increased $137.9 million, or 7.1%, to $2.08 billion at September 30, 2022, compared to $1.95 billion at June 30, 2022, and increased $405.9 million, or 24.2% from $1.68 billion at September 30, 2021;

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Consumer loans, of which 86.3% are home improvement loans, increased $33.2 million, or 6.8%, to $518.6 million at September 30, 2022, compared to $485.3 million in the previous quarter and increased $107.5 million, or 26.1% from $411.1 million in the comparable quarter one year ago. During the three months ended September 30, 2022, originations in the consumer portfolio included 80.8% of home improvement loans originated with a Fair Isaac and Company, Incorporated (“FICO”) score above 720 and 87.9% of home improvement loans with a UCC-2 security filing;

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Segment reporting reflected $9.3 million of net income for the Commercial and Consumer Banking segment and $794,000 of net loss for the Home Lending segment in the third quarter of 2022, compared to $4.5 million and $3.8 million of net income in the third quarter of 2021, respectively; and

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Capital levels at the Bank were 13.7% for total risk-based capital and 11.5% for Tier 1 leverage capital at September 30, 2022.

Segment Reporting

The Company reports two segments: Commercial and Consumer Banking and Home Lending. The Commercial and Consumer Banking segment provides diversified financial products and services to our commercial and

The following information was filed by Fs Bancorp, Inc. (FSBW) on Wednesday, October 26, 2022 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Fs Bancorp, Inc.'s 10-Q Quarterly Report:

Other - Other Highlight
A further decline in national and local economic conditions, as a result the effects of inflation, a potential recession or slowed economic growth, and any governmental or societal response to the COVID-19 pandemic, among other economic factors, could result in a material increase in the ACLL and may adversely affect the Company's financial condition and result of operations.

Revenue - Product Highlight
As part of our expanding lending products, the Company additionally offers residential mortgage and commercial construction warehouse lending consistent with our business plan to further diversify revenues.
Financial - Shares Highlight
The Company is a diversified lender with a focus on the origination of one-to-four-family loans, commercial real estate mortgage loans, second mortgage or home equity loan products, consumer loans including indirect home improvement ("fixture secured") loans which also include solar-related home improvement loans, marine lending, and commercial business loans.
Financial - Expense Highlight
Forward-looking statements include, but are not limited to: statements of our goals, intentions, and expectations; statements regarding our business plans, prospects, growth, and operating strategies; statements regarding the quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits.
Financial - Shares Highlight
Assuming continued payment during 2022 at this rate of $0.20 per share, our average total dividend paid each quarter would be approximately $1.5 million based on the number of our current outstanding shares (which assumes no increases or decreases in the number of shares, except in connection with the anticipated vesting of currently outstanding equity awards).
Revenue - Product
The primary sources are increases...Read more
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Noninterest expense decreased $678,000 to...Read more
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Gross margin on home loan...Read more
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Our business plan remains as...Read more
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Management entered into two asset...Read more
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Our current quarterly common stock...Read more
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The decrease in noninterest expense...Read more
Revenue - Product
The Company focuses on diversifying...Read more
Financial - Expense
Interest expense is a function...Read more
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Net interest income increased $11.0...Read more
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Interest income increased $6.3 million,...Read more
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The increase in deposits was...Read more
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Total deposits increased $167.6 million...Read more
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Management entered into two liability...Read more
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Interest expense increased $1.4 million,...Read more
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Total real estate loans increased...Read more
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Consistent with our goals to...Read more
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The average cost of total...Read more
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Interest expense increased $284,000, to...Read more
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Nonperforming loans, consisting solely of...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Fs Bancorp, Inc. provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: FSBW
CIK: 1530249
Form Type: 10-Q Quarterly Report
Accession Number: 0001558370-22-017117
Submitted to the SEC: Wed Nov 09 2022 3:32:44 PM EST
Accepted by the SEC: Wed Nov 09 2022
Period: Friday, September 30, 2022
Industry: Savings Institutions Not Federally Chartered